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Case 2 – Walmart: Navigating a Changing Retail Landscape

1.How does Walmart create value?
(Be sure to consider Dess’ discussion of value on pgs. 75-77 of your text)
Value – the amount that buyers are willing to pay for what a firm provides them and is measured by
total revenue, a reflection of the price a firm’s product commands and the quantity it can sell
Walmart creates value by negotiating the best prices with suppliers, which in effect passes
on the savings to customers. Their nearby locations also provide value to customers in the form
of travel convenience. Finally, another way is that they carry nearly everything which once again is
valued by customers due to its convenience.
Walmart creates value through its retail primary activities of inbound logistics, operations,
outbound logistics, marketing and sales, and service in its physical stores/e-commerce website.

2.Identify an example from within Walmart for each of the types of tangible resources as defined
by Dess. Page 88
Financial: a firm’s cash amount and cash equivalents, a firm’s capacity to raise equity, and a firm’s
borrowing capacity
 Walmart example: annual revenue
 Revenues of $485 billion pg. 1
Physical: modern plant and facilities, favorable manufacturing locations, state-of-the-art machinery
and equipment, proximity to customers and suppliers, distribution centers
 Walmart example: “90% of the US population was located within 10 miles of a Walmart store”
Technological: trade secrets, innovative production processes, patents, copyrights, trademarks
 Walmart example: “In October 2016, McMillon and his leadership team outlined key priorities
for the continuing transformation of Walmart into a leading omnichannel retailer.” p.16
 First/Early adopter of self checkouts in stores
Organizational: Effective strategic planning processes, excellent evaluation and control systems,
employee development, rewards systems
 Walmart example: SaveCatcher app that compares prices and gives the overpaid amount in
form of a gift card. P.16
 Walmart’s Lifelong LearningProgram
 Immediate $10 pay increase after completion of the Pathways training program pg. 14
 75% of management teams have started as hourly wage employees pg. 14
o Walmart promotes 200,000 employees a year

3.What are the resources/capability sources of Walmart’s competitive advantage?
(Hint – low price is a result, not a resource nor capability)
Walmart’s Competitive advantage is being a leader in the retail industry with its competitive low
prices. The resources of Walmart’s competitive advantage are a bundle of tangible, intangible, and organizational capabilities. The tangible resources are its revenue from leading market share, its distribution centers,

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